Adidas Says UEFA Euro 2012 to Fuel Record Soccer Sales

By Julie Cruz -
Jun 21, 2012

Adidas AG (ADS), the world’s second-
biggest sporting-goods maker, said it expects record soccer
sales of more than 1.6 billion euros ($2 billion) this year,
boosted by the European championships in Ukraine and Poland.

“Adidas is leading the way at UEFA Euro 2012 in every
respect -- in terms of product sales, brand visibility and
innovative strength,” Chief Executive Officer Herbert Hainer
said at a press conference in Warsaw today. “Adidas can already
be sure of defending its title as the most successful football
brand in Europe and the world.”

Today’s forecast exceeds the previous record of 1.5 billion
euros, set in 2010 when the last World Cup was held in South
Africa. Soccer accounts for more than 17 percent of revenue at
Herzogenaurach, Germany-based Adidas, which said in April that
total sales will rise almost 10 percent this year, compared with
an earlier goal for a mid-to high-single-digit percentage gain.

Adidas is defending its soccer leadership against Nike
Inc., (NKE) which has a goal to surpass the company as the sport’s
biggest brand and sponsored teams such as the Netherlands,
Portugal, Croatia, Poland and France at this year’s tournament.
Adidas controls about a third of a market it estimates is worth
as much as 5 billion euros a year.

“There’s momentum with the Adidas brand in football at the
moment, especially in footwear,” said Mark Josefson, an analyst
at Silvia Quandt Research GmbH in Frankfurt. “Nike wanted to
close the gap, but it has at best kept pace with Adidas, or has
probably fallen back. Football is associated with Adidas.”

Quarter-Finalists

Adidas said today that it will be the soccer market leader
in Poland this year and “has come significantly closer” to
becoming the biggest seller of sporting goods in the country by
2015. Sales of Adidas soccer products will double this year in
Ukraine, where the company is the sport’s biggest brand, it
said.

“I am very happy with the business development in Poland
and Ukraine,” Hainer said.

Adidas fell 0.7 percent to 58.56 euros as of 2:44 p.m. in
Frankfurt trading. The stock is up 16 percent this year, among
the best performers in Germany’s benchmark DAX Index.

Adidas is sponsoring six teams at the tournament, including
favorites Spain and Germany, both of whom have made the quarter-
finals. It is one of the 12 official sponsors of the event that
also include Sony Corp. and Carlsberg A/S. (CARLA) Adidas provides the
tournament’s official match ball, the Tango 12.

“Adidas not only benefits from the success of its teams,
but can also position itself onscreen and on-site via the
presence of officials, referees, volunteers or ball boys and
girls and team mascots wearing Adidas clothing,” said Andreas
Ullmann, head of market intelligence at German market researcher
Sport + Markt. “There are also hospitality opportunities which
can be used for competitions, promotions and networking.”

Tango 12

Adidas said today that it will sell more than 7 million
Tango 12 balls this year and that it already sold more than 1
million Germany jerseys, a record for a European championship.
The company sold “close” to 1 million Spain jerseys even in
the current economic situation in the country, Hainer said.

Adidas sales will rise to 14.81 billion euros this year,
according to the average estimate of 30 analysts surveyed by
Bloomberg. Twenty-eight analysts recommend buying the stock
while just two advise selling, data compiled by Bloomberg shows.

“Adidas still has the strongest heritage of any brand in
soccer,” Ullmann said. “Adidas has strong partnerships, which
have been built up over many, many years with major federations
and clubs.”

Adidas is “not interested” in buying Nike Inc.’s Umbro
soccer brand as Adidas is already the leader in the sport, CEO
Hainer told journalists today. Nike, the world’s biggest maker
of sporting goods, said in May that it will sell Umbro and Cole
Haan within a year to focus on its biggest brands. Nike acquired
Umbro, the U.K.-based soccer-apparel and footwear brand, in 2008
for $567 million.